‘Thermal power projects of Rs 2.5 lakh cr facing stress’

Source: The Hitavada      Date: 11 Feb 2019 09:47:32


Business Bureau,

Investments worth over Rs 2.50 lakh crore in thermal power projects, based on domestic coal, imported coal and gas, are facing stress, and immediate remedial measures are needed to ensure that they are revived in a time-bound manner, as per a report. The ASSOCHAM-Grant Thornton joint study noted that the country’s power sector has been one of the highly stressed sectors in recent times, with loans worth approximately Rs 1 lakh crore having turned bad or been recast.

“As per the recent estimates, around 66,000 MW capacity is facing various degrees of financial stress, including 54,800 MW of coal-based power, 6,830 MW of gas-based power and 4,570 MW of hydropower with the lenders having an exposure of around Rs 3 lakh crore to these assets, which is alarming, to say the least,” noted the study titled ‘Stressed assets in the Indian thermal power sector’.

Non-availability of regular fuel supply arrangements, lack of Power Purchase Agreements (PPAs), inability of promoters to invest equity and working capital, and regulatory and contractual issues are some of the major challenges faced by thermal power projects, it said.